Cowboys practice facility breaking ground as a business model

The Cowboys’ new practice facility “The Star” has now been opened for more than four months with a couple new additions soon to be added as we move into 2017. While many are used to Jerry Jones investing in expensive endeavors and constructions, this $1.5 billion complex might have been one of his savviest moves yet.

The Star was created to be the new practice facility for the Dallas Cowboys, but Jerry Jones also intended it to bring in many other organizations and facets. One of those groups is the Cowboys Football Academy, which teaches football to kids from ages 6-13. Nakia Codie is a former NFL player who now is one of the head instructors for this academy.

“We teach these kids the fundamentals of the game,” Codie said. “We teach them proper techniques. We really just teach them the actual game because a lot of kids come to camp never playing football before. We want those kids to have a great first experience.

Codie’s camp has been traveling to different locations summer after summer, trying to find a central site. They have practiced in AT&T Stadium, some Frisco middle schools and other locations in Plano. Now his camp will be help at The Star for the foreseeable future.

“It will be a great opportunity for kids in this area and other areas also to see this new stadium,” Codie said. “I’ve never seen a practice facility like this. I think it’s going to be the start of a trend. People are probably going to try and follow what Jerry Jones has done.”

These campers aren’t the only kids who will be utilizing this practice facility when the Cowboys players aren’t using it. The eight Frisco ISD high schools will continue to use the main field for football games every Thursday and Friday during high school football season. Frisco ISD invested $30 million dollars to obtain this accessibility.

Professor Michael Lysko is the director of the sports management program at SMU and has an extensive background in sports management, marketing and law. He said the connection between The Star and Frisco ISD is unlike other partnerships you hear about in the sports world.

“Everyone in sports talks about partnerships,” Lysko said. “Everyone, whenever they build a new stadium says it’s a partnership between the city and the team, but this seems to be more of a true partnership in the sense that Frisco ISD really has first and exclusive rights to Thursday and Friday night football. They can’t be bumped out of there for any reason.”

Lysko also sees The Star as a complex being built in the right city at the right time.

“This is a brand play as much as it is a real estate play,” Lysko said. “The halo of what the Dallas Cowboys represent is a brand. The general public can almost become engaged with the brand outside of the game itself. You’re making it an area where people can feel and touch and be a part of the brand.”

Beyond this brand, though, Lysko sees the business side of The Star’s development as groundbreaking.

“Jerry Jones has been a pioneer on the business side of football for a long, long time,” Lysko said. “This facility is part of a bigger development including a hotel, retail developments and a hospitality space. And in the facility, we’re talking about $30 million of non-NFL football revenue for concerts and boxing matches and really, name it.”

In building this new hub, the Cowboys used an economic approach known as positive externality, which is similar to what many golf courses do in surrounding their front and back nines with residential housing. Doing this raises the value in both.

At The Star, this is just one piece of “The $5 billion mile.” The Star ($1.5 billion) will be connected to the Frisco Station ($1.7 billion), The Gate ($1 billion) and Wade Park ($2 billion). These four projects are along the Dallas North Tollway and set to all be finished in the next couple of years. Frisco is also home to the Frisco RoughRiders -- one of the Texas Rangers minor league affiliates -- among many other sports organizations.

Jerry Jones hasn’t just settled for a practice facility -- he is surrounding the Star with other assets such as a retail and entertainment district right across the street and an Omni hotel almost directly connected to the Ford Center.

Stan Liebowitz is a professor of economics at the University of Texas and Dallas and he said through positive externality, Jones is enhancing the value of all businesses involved.

“That’s the thinking here that these two -- the retail facility and the Cowboys facility -- have positive impacts on each other and that gives them an advantage in the market,” Liebowitz said. “The bottom line is he’s hoping to make money with this. It brings people who wouldn’t necessarily have come to Frisco into Frisco.”

While Jerry Jones has shown time and time again he is a business leader separating the Cowboys from the pack with sensible foresight, the ability to make money out of his eventual $1.5 billion, 91-acre facility would probably not have been possible without a rapidly up-and-coming city in Frisco and a state with some of the best job creation.

“Frisco’s a place where lots of new people to the area are going,” Liebowitz said. “It’s going where Plano is. If you go back 20 years, the story of Frisco now is the story of Plano then. If this turns out to be a big success, then you can expect other teams to start coping it quickly.”

Roger Meiners is a professor of economics in the College of Business at the University of Texas at Arlington. He sees a nation-wide trend of movement to certain areas of the country -- like Frisco -- as a key factor at play with The Star’s potential success.

“We see everyone moving to large urban areas because of all the amenities,” Meiners said. “That’s where the jobs are going. Frisco went about preparing for this growth very methodically. It wasn’t helter skelter. It’s an incredibly well-developed city. It’s not just where it’s located -- it’s using real estate to its greatest advantage and not just thinking of one thing alone but putting different things together.”

Meiners also said the ability to offer people multiple experiences in one central location is a business model starting to be used in many different ways.

“The conglomeration of having more than one thing, rather than just a stand alone unit out in the middle of nowhere, is honestly a new step for practice facilities,” Meiners said. “The cities that don’t start to ante up and help produce a really nice facility for these NFL teams or MLB teams are going to be gone. This is becoming a huge trend.”

“They’re integrating all of these partnerships and being a key component of this, almost like a centerpiece of the development,” Lysko said. “This facility is going to be used year round.”

Meiners also said it is important to give Jones credit in jumping on board and creating a product in a city with such potential.

“He is creating a hub for profit in such a unique spot,” Jones said. “You have extremely foresighted business leaders applying good business sense to what they’re doing with many of them looking 10 years ahead. That’s who Jones is working with.”

So the world’s most valuable sports franchise, according to Forbes, has upped the ante by creating a revenue stream that will benefit the Cowboys, the city of Frisco, Frisco ISD and all third parties involved. Jerry Jones has changed what has been universally known as a stand-alone sports-centric structure into an unparalleled multi-use profit center.